Washington Insider -- Tuesday

A Clean Debt Ceiling Bill

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

NGFA, NAEGA Outline Trade Priorities for Trump Administration

The National Grain and Feed Association (NGFA) and the North American Export Grain Association (NAEGA) submitted a joint statement to the Trump administration this week regarding the performance of free trade agreements.

Responding to a request for comments from the Office of the U.S.Trade Representative (USTR) and the U.S. Department of Commerce (DOC) regarding the administration's assessment of free trade agreements and the nation's trade relations with other members of the World Trade Organization, the NGFA and NAEGA identified opportunities to update and modernize U.S. free trade agreements and highlighted the urgency in initiating trade negotiations with key Asia-Pacific markets.

Withdrawing from the Trans-Pacific Partnership (TPP) trade agreement "has created a void that foreign export competitors are aggressively exploiting to the detriment of U.S.agricultural exports and our nation's economy," the NGFAand NAEGA statement said.

The two groups said proper trade negotiations would: Expand market access and gain tariff concessions, improve regulatory consistency and cooperation; remove non-tariff barriers that lack scientific merit; create consistency in assessing the safety of plant breeding technologies; develop consistent approach for managing low-level presence of yet-unapproved biotech traits; and ensure safe and orderly passage for rail and truck freight transportation.

China Releases 980 Quarantined US Breeding Hogs

Chinese authorities released 980 out of 1,012 breeding hogs that arrived from the U.S. in June, releasing them from where they were held in quarantine for the past 45 days in Hunan province, according to the Xinhua News Agency.

The imported hogs included breeds such as durocs, landraces and large whites, breeds the report said "grow faster and are superior to China's domestic breeds in many aspects." While they were quarantined the animals were cared for by professional animal nurses and given any necessary treatments and massages, the report said. The 980 hogs will be distributed to six farms in Hunan, Guangdong and Henan as well as Tianjin Municipality.

Washington Insider: A Clean Debt Ceiling Bill

Politico reported last week that Republican congressional leaders are quietly preparing to pass a “clean” debt ceiling increase setting the stage for a high-risk showdown with rank-and-file Republicans this fall.

Trump administration officials, led by Treasury Secretary Steven Mnuchin, are imploring Congress to raise the $19.8 trillion debt limit with no strings attached by the end of September. Senate Majority Leader Mitch McConnell, R., Ky., and Speaker Paul Ryan, R., Wis., are “well aware” they need Democrats to pass any debt bill through the Senate and are unhappy about that fact, Politico said.

But beyond the leadership, there are few Republican takers, at least so far. GOP lawmakers in both chambers of Congress want any debt ceiling hike to be paired with spending cuts or fiscal reforms. Lawmakers repeatedly made the same demands during Barack Obama’s two terms.

That means McConnell and Ryan will have to rely on Democrats and enough moderate Republicans to help them avert a financial catastrophe by Sept. 29, the day Treasury predicts it will exhaust its borrowing authority and the very last day for Congress to act.

“We shouldn’t even play with that. It should just be ‘clean,’” said Senate Finance Committee Chairman Orrin Hatch, R., Utah, who supports McConnell’s strategy. “Some conservatives think they can get some programs cut. Well, that’s not gonna happen … We have to pay our bills and anybody who doesn’t want to do that doesn’t deserve to be here.”

Sen. James Lankford, R., Okla., has a different view. “You should never have a time that we deal with the debt ceiling that we’re not dealing with the reason that we have debt ceilings,” Lankford said.

Some Senate Democrats have floated seeking a reauthorization of health insurance programs for low-income children in return for their support on the debt ceiling. House Democrats likewise are considering a play to leverage their own priorities.

McConnell and top Republicans are eager to avoid a repeat of the 2011 standoff between Congress and the Obama White House that led to a downgrade of the nation’s sterling credit rating.

One option being considered is to roll a debt ceiling increase into a spending bill that must pass by Sept. 30 to avoid a federal government shutdown. Moderate Republicans in the House, including Rep. Charlie Dent, R., Penn., a leader of the Tuesday Group, have been imploring House leaders to champion such a package as well.

Though Treasury Secretary Mnuchin has been the dominant voice of the administration on this issue, OMB Director Mick Mulvaney earlier this year insisted that spending cuts or other reforms should be part of any debt hike.

House leaders are waiting for the Senate to act first. While they have not publicly endorsed a “clean” debt ceiling approach, House GOP leaders are preparing to push whatever the Senate passes and clear it for President Trump’s signature.

Democrats don’t want to risk defaulting on the debt. But they’re also concerned that after offering up their votes to Republicans to clear the debt ceiling hurdle, Republicans will promptly turn around in October and pass tax cuts that could balloon the deficit and disproportionately benefit the wealthy.

So Democrats are waiting for Republicans to reveal their strategy before going public with their own demands.

The likelihood that House leaders will have to lean on Democrats could force a break in the GOP tradition known as the Hastert Rule, which dictates that a “majority of the majority” must support legislation. However, most of Speaker Ryan's 240-member conference is expected to oppose a clean debt ceiling bill, perhaps forcing GOP leaders to ignore conservatives because they can’t give them what they want and expect it to clear the Senate’s higher, 60-vote threshold.

Thus, a tough, tough fight is expected. Even if House GOP leaders receive cover from the White House the call for cuts from the base won’t be easy to resist for some. “I wish we could tie things to it,” said Sen. Richard Shelby, R., Ala., said. “But can we? I don’t know.” Clearly, this is a high stakes fight producers should watch, Washington Insider believes.

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